JAI HANUMAN DISTRIBUTORS Vs. STATE OF BIHAR

JUDGEMENT

(1.) The petitioner, a dealer in India Made Foreign Liquor (for short IMFL) registered under the Bihar Finance Act, 1981 (hereinafter referred to as the Act) has challenged the assessment order dated 30.6.2003 with regard to assessment period 1999-2000 whereby demand of Rs. 5,47,725/- has been raised on the basis of circular of the Commissioner dated 12th July, 1994 whereby direction has been issued to deduct only sales tax-and not additional tax paid at the immediately preceding stage of the sale from the total sale price in order to arrive at the value added sale price while determining the tax which is to be levied in the hands of the petitioner.

(2.) The case of petitioner is that for determining the liability to pay tax, the sales tax and additional tax paid at the immediately preceding stage of the sale are to be deducted from the total sale price in view of the definition of tax under Section 2(x) of the Act which includes both tax and additional tax. On this ground, the assessment order is vitiated as additional tax has not been deducted and the direction of the Commissioner on the basis of which assessment order has been passed is contrary to the statutory provision.

(3.) The stand of the State on the other hand is that the petitioner is a dealer in IMFL and the said product is notified for the multi point levy of tax under Section 11(3) of the Act read with Entry No. 2 in Annexure-11-B of the Act. The adjustment of tax on each point of levy of tax will be made in terms of Rule 10(2)(b) of the Bihar Sales Tax Rules, 1983 (hereinafter referred to as the Rules). According to Section 11 (3) of the Act, sales tax is to be charged on the sale price and the sales tax paid at the earlier stage is to be deducted from the tax as calculated. The additional tax is levied under Section 6 of the Act and it is a self contained provision and its provision will apply in view of the non-obstante clause excluding the operation of Sections 11, 12, 13 and 21 at the rate and in the manner with regard to sales and purchase as provided in the said section. The circular dated 12th July, 1994, contained in Annexure-1 to the writ application is old one and the Assessing Officer was not even aware of the said circular and he has passed the assessment order taking into consideration the provisions contained in Section 11(3) of the Act and Rule 10 of the Rules. Under Section 11(3) of the Act only sales tax and not additional tax is to be deducted as the tax paid at the preceding stage. If total tax paid at the earlier stage is to be deducted, then the provision of Section 6 of the Act will become redundant for the simple reason that the additional tax is payable at each and every stage of sale.